After Wednesday’s dismal announcement by the National Association of Realtors that existing homes sales had fallen to a 12-year low, yesterday we found out the plight of new home sales.
Unfortunately, new homes sales weren’t any better. In fact, they were worse.
From Bloomberg by Courtney Schlisserman entitled: New-Home Sales in U.S. Plunge to Record-Low 309,000
“Sales of new homes in the U.S. plunged in January to a record low as soaring unemployment and mounting foreclosures drove buyers away.
Purchases dropped 10 percent to an annual pace of 309,000, the lowest level since data began in 1963, the Commerce Department said today in Washington. The median price decreased 13.5 percent, the most in almost four decades.
Economists had forecast new-home sales would fall to a 324,000 pace last month from a previously reported 331,000, according to the median of 73 projections in a Bloomberg News survey. Estimates ranged from 291,000 to 350,000.
Even as they slash prices, builders are likely to keep losing customers as foreclosures drive down the value of existing homes further, making them comparatively more affordable. The Obama administration is making a priority of keeping more Americans in their homes to stem the collapse in property values at the root of the credit crisis.
“There is a risk that you continue to see foreclosures and you continue to have new inventory added to the market that prolongs the adjustment process,” Zach Pandl, an economist at Nomura Securities International Inc. in New York, said before the report.
The number of new homes for sale at the end of the month fell 3.1 percent to 342,000. The supply of homes at the current sales rate surged to a record 13.3 months’ worth.
The National Association of Realtors has said five-to-six months’ supply is consistent with a stable market.
The median price of a new home decreased to $201,100, the lowest level since December 2003. Sales of new homes were down 48 percent from January 2008.
“The past five months have been among the most difficult in U.S. economic history,” Chief Executive Officer Robert Toll said on a conference call Feb. 11. Homebuyers are worried they may lose their jobs and won’t be able to sell their existing homes, he said.”
Another day, another set of lousy housing data. The bottom in housing is nowhere in sight.
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